Correlation Between Bank Mandiri and Saturn Oil
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Saturn Oil at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank Mandiri and Saturn Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Mandiri Persero and Saturn Oil Gas, you can compare the effects of market volatilities on Bank Mandiri and Saturn Oil and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank Mandiri with a short position of Saturn Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Saturn Oil.
Diversification Opportunities for Bank Mandiri and Saturn Oil
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Saturn is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Saturn Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saturn Oil Gas and Bank Mandiri is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank Mandiri Persero are associated (or correlated) with Saturn Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saturn Oil Gas has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Saturn Oil go up and down completely randomly.
Pair Corralation between Bank Mandiri and Saturn Oil
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 5.33 times more return on investment than Saturn Oil. However, Bank Mandiri is 5.33 times more volatile than Saturn Oil Gas. It trades about 0.06 of its potential returns per unit of risk. Saturn Oil Gas is currently generating about 0.0 per unit of risk. If you would invest 30.00 in Bank Mandiri Persero on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Bank Mandiri Persero or generate 36.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.71% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Saturn Oil Gas
Performance |
| Timeline |
| Bank Mandiri Persero |
| Saturn Oil Gas |
Bank Mandiri and Saturn Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Saturn Oil
The main advantage of trading using opposite Bank Mandiri and Saturn Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Saturn Oil can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Saturn Oil will offset losses from the drop in Saturn Oil's long position.The idea behind Bank Mandiri Persero and Saturn Oil Gas pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Saturn Oil vs. Permian Resources | Saturn Oil vs. Devon Energy | Saturn Oil vs. EOG Resources | Saturn Oil vs. Coterra Energy |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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